Cbina’a 


CHINA’S  Foremost  Need 

by 

MR.  R.  YAMASHINA 

Commercial  Commissioner  to  the  United  States 
from  the  Tohio  Chamber  of  Commerce 


Also  suggestions  by  Mr.  Lindsay  Russell 
and  Mr.  Rickard  Waskburn  Ckild 
designed  to  kelp  Ckina 


Addresses  at  a luncheon  given  to  Mr.  Yamashina 
at  the  Lawyers’  Club,  New  York  City,  by  the 
Executive  Committee  of  the  Japan  Society 


Digitized  by  the  Internet  Archive 
in  2017  with  funding  from 
Columbia  University  Libraries 


https://archive.org/details/chinasforemostneOOyama_0 


CHINA’S  Foremost  Need 


“The  reconstruction  of  China’s  monetary  system  should 
be  the  first  step  in  any  program  to  help  that  republic,”  said 
Mr.  R.  Yamashina,  head  of  the  Commercial  Commission  sent 
to  the  United  States  by  the  Tokio  Chamber  of  Commerce, 
at  a luncheon  given  him  by  the  Executive  Committee  of  the 
Japan  Society  at  the  Lawyers’  Club,  New  York  City,  on 
December  19,  1918. 

Mr.  Yamashina  said  not  only  was  this  his  belief,  but 
that  he  had  been  commissioned  by  sixty  chambers  of  com- 
merce of  Japan  to  carry  this  message  to  the  chambers  of 
commerce  and  the  business  men  of  America. 

“China  now  has  the  silver  standard,  and  the  value  of 
silver  coins,  as  of  the  metal  itself,  fluctuates  from  day  to 
day,”  Mr.  Yamashina  asserted.  “This  makes  it  difficult  for 
foreign  firms  to  operate  in  China,  as  it  makes  their  earnings 
of  speculative  uncertainty.  It  also  keeps  foreign  capital 
shy,  as  investors  abroad  hesitate  to  risk  their  money  in 
China  while  the  shifty  silver  standard  is  in  effect. 

“The  gold  standard  is  of  vital  necessity  for  China.  Now, 
while  silver  commands  such  a soaringly  high  price,  is  the 
time  to  press  the  campaign  for  monetary  reform.  The  iron 
is  hot,  and  we  should  strike  at  once. 

“Now  how  should  we  go  about  it  to  help  China  make 
this  reform  ? That  is  a problem  we  ought  to  tackle  strenu- 
ously and  intelligently.  China  is  divided  into  many  provinces 
and  each  province  has  its  own  currency  system.  The  money 
of  these  provinces  is  inconvertible  paper  money  and,  because 
it  is  inconvertible,  it  represents  mere  scraps  of  paper  out- 
side of  China. 

“This  paper  money  should  be  purchased  by  the  Central 
Chinese  Government.  Or  we  may  begin  the  work  of  reform 
with  any  province  which  is  willing  to  effect  this  reform. 
Whether  we  shall  begin  in  a general  way,  through  the  cen- 
tral Government,  or  with  the  separate  provinces,  is  a deci- 
sion to  be  reached  after  the  preliminary  work  is  under  way. 


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“It  goes  without  saying  that  the  Chinese  government 
would  require  large  capital  to  accomplish  this  reform,  and 
because  it  lacks  the  necessary  capital  it  is  up  to  the  United 
States  and  Japan  to  make  a loan  to  permit  its  success.  How 
much  money  would  be  required  is  a question  over  which 
experts  differ,  because  of  the  incompleteness  of  Chinese  sta- 
tistics on  which  to  base  estimates,  but  in  round  figures  the 
preliminary  guess  may  be  placed  from  about  $250,000,000 
to  $300,000,000. 

“In  initiating  such  a movement,  it  is  very  necessary  for 
us  to  bear  in  mind  that  China  is  an  old  nation,  and  that  an 
old  nation  like  an  old  man  values  its  dignity.  Therefore,  it 
is  necessary  that  we  should  not  force  China,  but  should 
resort  to  such  means  as  would  make  it  appear  that  China 
herself  is  taking  the  initiative  in  this  movement.  In  fact, 
the  Chinese  chambers  of  commerce,  as  a body,  have  passed 
resolutions  favoring  the  adoption  of  the  gold  standard  for 
China.  Should  such  a reform  be  initiated  by  other  peoples, 
China  may  feel  that  she  is  forced  to  do  so  more  for  the  bene- 
fit of  others  than  for  herself.  This  is  a very  important  point 
for  proponents  of  the  reform  to  heed,  as  it  is  the  Chinese 
who  will  receive  the  greatest  benefit  from  a smoothly  work- 
ing currency  system. 

“The  business  men  of  China  are  eager  to  see  this  reform 
accomplished  as  soon  as  possible,  and  it  will  be  a compara- 
tively easy  task  for  the  combined  capital  of  the  United 
States  and  Japan  to  finance  this  reform  and  thus  uplift  the 
morale  of  the  Chinese  people.  When  the  currency  system  is 
able  to  get  along  without  crutches,  the  entire  Chinese  na- 
tion will  be  benefited  in  a commercial  way  and,  furthermore, 
may  be  led  to  forget  the  differences  which  create  the  bitter 
factions  of  China.  This  would  tend  to  strengthen  the  pres- 
ent administration,  which  assumed  office  on  October  10,  this 
Fall.  This  administration  is  the  best  and  strongest  govern- 
ment China  has  had  since  it  became  a republic.  For  one 
thing,  it  is  more  conciliatory  toward  both  the  Northern  and 
Southern  factions. 

“We  ought  to  work  for  the  benefit  primarily  of  China, 
not  of  ourselves.  All  the  world  will  receive  the  secondary 
benefit,  but  we  must  consider  China’s  interests  first. 


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“With  the  gold  standard  in  practice,  more  capital  would 
flow  into  China  to  develop  her  resources  and  to  give  new 
facilities  in  transportation,  which  are  badly  needed.  China 
is  a vast  country  with  a painfully  cramped  transportation 
system.  The  reform  would  help  the  domestic  trade  of  China, 
as  at  present  trading  between  provinces  is  difficult  because 
of  the  monetary  handicap.  But  most  of  all,  the  reform  would 
prove  a great  boon  to  foreign  trade.  America  would  benefit 
greatly  in  commerce  with  China  if  the  gold  standard  were 
adopted  by  the  Peking  Government.” 

Trusteeship  for  China 

Lindsay  Russell,  president  of  the  Japan  Society,  said: 

There  has  been  some  fear  expressed  in  the  Japanese 
press  and  by  Japanese  commercial  organizations  that  Am.er- 
ica  will  become  a more  serious  competitor  for  Japan’s  trade 
with  China  and  Siberia.  It  is  true  that  the  Webb  Bill  per- 
mits combinations  in  the  United  States  for  the  promotion 
of  foreign  trade.  This,  of  course,  means  co-operation  be- 
tween American  firms. 

It  makes  possible  collective  bargaining  between  groups 
of  manufacturers  on  this  side  and  the  measure  prevents 
ruinous  competition  in  spheres  of  influence.  It  means  also 
a central  organization  through  which  America  and  Japan 
can  discuss  mutual  interests  and  I apprehend  that  when 
intelligent  American  business  men  realize  the  advantages 
which  the  Japanese  have  as  respects  that  market,  advan- 
tages which  we  cannot  overcome,  that  the  inclination  to 
co-operate,  to  do  business  through  them,  will  be  all  the 
stronger. 

First  of  all  Japan  has  the  stimulus  of  necessity,  which 
is  the  greatest  of  all  incentives  to  human  activity.  Then 
there  are  proximity  to  market,  port  facilities  and  spheres  of 
influence;  the  advantage  of  superior  shipping  and  banking 
facilities,  more  intimate  knowledge  of  the  language,  customs 
and  currency  of  the  countries. 

In  addition  to  this  you  have  solved  the  problem  of  sup- 
plying the  Chinese  with  purchasing  power.  The  creation 
by  Japan  of  the  great  bean  industry  in  Manchuria  affords 


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one  of  the  most  remarkable  examples  of  what  can  be  done 
to  bring  prosperity  to  a hitherto  backward  people. 

What  are  we  to  do  about  it?  What  is  the  remedy?  Co- 
operation is  the  solution.  Already  several  of  our  great 
American  corporations  have  established  branches  in  Japan 
on  a fifty-fifty  basis  or  thereabouts.  The  branches  of  some 
great  American  banks  operating  in  Japan  have  more  Jap- 
anese employees  than  Americans. 

The  exports  from  the  United  States  to  China  total  about 
twenty-five  millions  a year  and  if  one  were  to  analyze  these 
one  would  find  that  American  firms,  failing  to  take  advan- 
tage of  their  opportunity,  Japanese  firms  have  opened  offices 
in  various  cities  of  the  United  States  and  are  exporting  more 
general  merchandise  to  the  Far  East  than  American  firms. 

A^  to  conditions  in  China,  what  was  true  of  China  ten 
years  ago  is  true  to-day.  China  is  politically  bankrupt  in 
that  she  has  failed  in  self-government;  morally  bankrupt 
in  that  graft  and  corruption  permeate  every  governmental 
and  corporate  enterprise;  financially  bankrupt  in  that  her 
revenue  is  practically  in  the  hands  of  receivers.  What  is 
needed  are  stem  and  efficient  measures  such  as  England 
applied  to  Egypt,  the  United  States  applied  to  Cuba,  and 
Japan  applied  to  Korea.  If  American  sentiment  could  have 
re-organized  China,  it,  no  doubt,  would  have  given  it  one  of 
the  best  governments  in  the  world.  Japan  will  not  exploit 
China.  Under  proper  guidance  China  will  become  an  inter- 
national asset  instead  of  a liability. 

The  next  question  is  what  nation  or  nations  shall  apply 
these  measures?  Many  will  answer:  the  League  of  Nations. 
For  my  part  I am  skeptical  about  the  proposed  League  of 
Nations,  for  while  it  is  effective  in  time  of  v/ar,  yet  in  time 
of  peace  the  force  which  binds  them  in  war — self-interest 
and  self  preservation — is  centrifugal.  If  one  wishes  to  study 
the  working  of  a League  of  Nations  in  time  of  peace,  con- 
sider that  which  was  formed  in  Pekin  in  1900  as  a matter  of 
protection  from  the  Boxers.  Ask  the  Chinese  how  inter- 
national interests  sometimes  clash  with  human  brotherhood. 

A League  having  as  its  dominant  partners  Great 
Britain,  the  United  States  and  Japan  would  be  effective. 
These  countries  might  preserve  the  peace  of  the  world  by 


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acting  as  regional  directors — Great  Britain  for  Europe,  the 
United  States  for  this  hemisphere  and  Japan  for  Asia; 
any  one  failing  to  preserve  order  to  call  upon  the  others. 
Under  this  arrangement  Japan,  with  the  co-operation  of 
Great  Britain  and  the  United  States,  could  constitute  a trus- 
teeship for  the  reorganization  of  China. 

The  war  has  taught  us  the  value,  even  the  necessity, 
of  co-operation  in  attaining  a common  end.  Surely  the  de- 
velopment of  the  vast  resources  of  China  and  Siberia  and 
the  establishment  of  orderly  government  will  be  of  benefit 
not  only  to  those  countries  but  to  the  rest  of  the  world.  Let 
us  then,  I submit,  co-operate  with  Japan  in  that  develop- 
ment. 


Joint  Commission  for  China 

Richard  Washburn  Child,  who  presided,  said: 

The  bad  friend  of  the  Chinese  is  he  who  administers 
the  anesthetic  of  false  hope  and  helps  a bad  condition  under 
a monarchy  to  go  to  worse  condition  under  a Republic,  first 
corrupt  and  now  disintegrating.  Foreign  observers  who  see 
only  Hong  Kong,  Shanghai,  the  Yangste  River,  Hankow, 
Pekin  and  Tientsin  do  not  know  China.  They  see  foreign 
concessions  and  come  in  contact  with  a painted  diplomatic 
mask  of  scholarly  urbanity  behind  which  the  Chinese  politi- 
cian hides  while  pla5dng  one  foreign  interest  against  another 
on  the  one  hand  and  exploiting  the  unfortunate  millions  of 
Chinese  on  the  other.  The  material  resources  of  China  will 
not  be  developed  nor  the  human  resources  developed,  no 
matter  how  much  money  is  loaned  to  China  unless  there 
follows  actual  administrative  help  from  without.  In  other 
words  China  will  not  be  helped  by  the  outside  world  unless 
help  is  given  in  the  expenditure  of  money  as  well  as  in  the 
raising  of  money.  This  means  that  China,  which  is  now  in 
more  helpless  plight  than  ever — her  territory  and  peoples 
split  into  factions,  with  the  buying  and  selling  of  mercenary 
soldiery  almost  the  sole  basis  of  political  power — not  only 
needs  the  banker  but  the  administrator  as  well. 

There  are  bad  friends  of  the  Chinese  who  have  a senti- 
mental regard  for  the  principle  of  self-determination.  They 


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overlook  the  fact  that  no  interference  ever  undertaken  by 
foreigners  in  China  has  been  anything  but  a blessing  to  the 
Chinese  and  no  inroad  made  by  foreigners,  except  the  inroad 
of  the  opium  traffic,  has  ever  been  anything  but  salvation 
of  the  Chinese  in  the  sanctuary  of  the  foreign  concession 
from  the  petty  “squeeze”  of  an  exploiting  ruling  minority. 
It  is  almost  impossible  to  conceive  of  anything  one  can  do 
to  the  Chinese  millions  which  will  not  help  them  to  escape 
from  the  world  they  know — a world  of  utter  poverty,  degen- 
erate practices,  infanticide,  ceaseless  labor,  no  schools,  no 
justice,  no  communications,  no  sense  of  co-operative  en- 
deavor. 

These  bad  friends  of  the  Chinese  say  truthfully  that 
China  long  long  ago  had  a glorious  past,  productive  of  phil- 
osophy and  arts.  They  say  truthfully  that  great  resources, 
material  and  human,  are  in  China  but  they  encourage  us  to 
listen  to  the  eternal  wail  of  the  Chinese  politician  “Let  us 
alone.”  To  “let  China  alone”  will  be  to  allow  a large  fraction 
of  the  world’s  population  and  territory  to  go  into  the  biggest 
running  sore  on  the  face  of  the  globe. 

When  I came  back  from  China  I submitted  to  those  who 
handle  the  foreign  affairs  of  this  administration  a brief  of 
a proposal  that  the  United  States  should  take  the  lead  in 
offering  China  the  administration  of  a joint  commission, 
upon  which  should  be  two  Chinese  and  administrators  from 
the  United  States,  Great  Britain  and  France  with  a Japanese 
statesman  as  Chairman,  because  China  and  her  weakness  is 
a graver  matter  to  Japan  than  to  any  other  nation.  I have 
continued  to  advocate  this  method  of  dealing  with  China’s 
reconstruction  because  there  is  nothing  hopeful  in  China 
reconstructing  herself.  Conditions  are  worse  constantly — 
nor  will  bankers’  control  alone  reach  far  enough.  It  is  not 
sufficient  to  attend  to  China’s  income— taxation  system, 
finance,  loans:  it  will  be  necessary  to  attend  helpfully  to 
China’s  outgo— her  development  of  justice,  schools,  safety  of 
life  and  property,  defence,  communications  and  to  develop 
under  all  these  a spirit  of  co-operative  endeavor  so  that  the 
Chinese  themselves  would  learn  the  gentle  art  of  working 
together  and  of  making  ready  to  stand  on  their  awn  feet 
in  administration. 


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